Hedgeye Podcasts Ep.133 Real Conversations → Inside Credit: Rates, CLOs, and the Next Phase of the Cycle w/ Ross Burnaman
Dec 17, 2025
Join Ross Burniman, Director at Eldridge Capital Management, as he dives into the intricate world of credit markets. With his expertise in structured credit, Ross simplifies the complex structures of CLOs and their unique resilience features. They explore how rising interest rates affect credit performance and dissect macro risks using real-world case studies for clarity. Learn why CLOs may offer a safer haven compared to traditional bonds and the potential pitfalls of investing in AI startups. A must-listen for anyone interested in savvy credit strategies!
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Transcript
Episode notes
Sector Pods Build Credit Edge
- Eldridge concentrates credit expertise by sector pods to gain deep, repeatable knowledge of companies and risks.
- This sector-first approach enables better credit selection and relative-performance judgments across industries.
Passing On First Brands And Tricolor
- Ross recounts repeatedly passing on First Brands and Tricolor after underwriting concerns, avoiding large losses later linked to fraud charges.
- Those repeated passes illustrate how disciplined due diligence prevented meaningful exposure to eventual frauds.
Diversification Dampens Idiosyncratic Risk
- CLO ETFs look through hundreds of loans; First Brands was under 0.25% of CLOZ's $110bn look-through collateral.
- That diversification plus multi-point structural cushion makes single frauds immaterial to BBB tranche creditworthiness.